Opposition Brief — Rockland Industries, Inc. v. Chumbley

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No. 87-1220 FEB 19 1988

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

ROCKLAND INDUSTRIES, INC.,

Petitioner,

Vv.

JAMES CHUMBLEY, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

JOHN G. ROBERTS, JR.*

WILLIAM D. NUSSBAUM

STEVEN J. ROUTH

HOGAN & HARTSON

555 Thirteenth Street, N.W.

Washington, D.C. 20004

(202) 637-6448

Counsel for Respondents

* Counsel of Record

WILSON - Eres Printinc Co.. Inc. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Did the Court of Appeals correctly apply to the par-

ticular facts of this diversity case the universally-accepted

abuse of discretion standard in reviewing the trial court’s

decision to grant a new trial?

(i)

ii

PARTIES TO THE PROCEEDINGS

Respondents and plaintiffs-appellants below are five in-

dividuals: James Chumbley, Thomas Lenchek, Michael

Corke, Jo Yount, and Adrian De Bee. Petitioner and

defendant-appellee below is Rockland Industries, Inc.

TABLE OF CONTENTS

Page

Rp gy RG 5 oy | | cc ce i

PARTIES TO THE PROCEEDINGS ......0.000..000000...0... ii

Pr i occ ccnscadadanosanane 2

REASONS THE PETITION SHOULD BE DENIED.... 10

I. There Is No Conflict Among The Circuits........ 10

II. The Highly Fact-Specific Decision Below Was

Correctly Decided, And Has No Significance Be-

yond The Confines Of This Case........................... 14

CONCLUSION ...................: ATLAS Ce TA I A a ee A 16

(iii)

iv

TABLE OF AUTHORITIES

Cases

Page

Abasiekong v. City of Shelby, 744 F.2d 1055 (4th

6.) IRR iar ARAN Pee oe ert nee mT 9, 10, 13

Aetna Casualty & Surety Co. v. Yeatts, 122 F.2d

BE Is, ROD inrsisakereticibenicebcbsvcbimcaidicuoacess 13

Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33

BESO RSS N SECS RO ANTS Rous, ie Ue hele vae st Ra 11

Berner Vv. British Commonwealth Pacific Airlines,

Ltd., 346 F.2d 532 (2d Cir. 1965), cert. denied,

Sa I I hicieron 10

Coffran vV. Hitchcock Clinic, Inc., 683 F.2d 5 (1st

Cir.), cert. denied, 459 U.S. 1087 (1982) _...... 10

Conway Vv. Chemical Leaman Tank Lines, Inc., 610

ae CR SD bccn etic. 10

Fairmount Glass Works v. Cub Fork Coal Co.,

Se eR eis ccs thediintctdaneddisebiediicceiectinecas 11

Fount-Wip, Inc. Vv. Reddi-Whip, Inc., 568 F.2d 1296

Sgt» ER MRE ee Reet seas esse le pe Se 10

General Foam Fabricators, Inc. v. Tenneco Chemi-

cals, Inc., 695 F.2d 281 (7th Cir. 1982)................ 10

Grove Vv. Dun & Bradstreet, Inc., 438 F.2d 433 (3d

Cir.), cert. denied, 404 U.S. 898 (1971).............. 10

Harris v. Quinones, 507 F.2d 533 (10th Cir. 1974)... 12

J & H Auto Trim Co., Inc. Vv. Bellefonte Insurance

Co., 677 F.2d 1365 (11th Cir. 1982) ..................... 12

Johnson V. Parrish, 827 F.2d 988 (4th Cir. 1987) .. 13

Lind v. Schenley Industries, Inc., 278 F.2d 79 (3d

Cir.), cert. denied, 364 U.S. 835 (1960) .............. 14

Mainland Industries, Inc. v. Standal’s Patents Ltd.,

700 F234 746 (Fea, Civ. 1906) ......................... 10

Manning V. Altec, Inc., 488 F.2d 127 (6th Cir.

| RAST NDIA GAA Sot. PSION e CTE 0D ON CRO 10

Marshall’s U.S. Auto Supply, Inc. v. Cashman, 111

Ee Uae ener 10

Midcontinent Broadcast Co. v. North Central Air,

Ince., 471 F.2d 357 (8th Cir. 1973) -_.... Pe: Aor 9

Neely v. Martin K. Eby Construction Co., Inc., 386

ESR BE ip ACTS SCAG ae art Ua eet 14

Russell vy. United Parcel Service, Inc., 666 F.2d

oi Bt Lt | See e mn mann erNeE aE 10

Vv

TABLE OF AUTHORITIES—Continued

Page

Taylor v. Washington Terminal Co., 409 F.2d 145

CE re I ies ils nace ip heed ccanapanncademoanies 10

The Monrosa v. Carbon Black Export, Inc., 359

ee reali lctichiinclediccanctninadorenmcions 12-13

United States v. Johnston, 268 U.S. 220 (1925).... 14

United States v. Socony-Vacuum Jil Co., Inc., 310

Rai eI ge fic io cce thao can i

Williams v. City of Valdosta, 689 F.2d 964 (11th

a: ia 10

Williams v. Nichols, 266 F.2d 389 (4th Cir. 1959)... 13

Wyatt v. Interstate & Ocean Transport Co., 623

oe gE te Baar eee emannee 13

Rules

Es OM eS Gf Savane, Sen een ea ae 138, 14

Fourth Circuit Internal Operating Procedure 36.3.. 14-15

See NG ch isc Nl ih sks <i cahesg saan inictgnintannncentin 16

Other Authority

Advisory Committee Notes to Fed. R. Civ. P. 50,

ie III bic pithesapnsiiicbadatbed cadatheteadicaiabad abibdemaies 13-14

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

No. 87-1220

ROCKLAND INDUSTRIES, INC.,

Petitioner,

Vv.

JAMES CHUMBLEY, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

Respondents (collectively “Chumbley”) respectfully pray

that this Court deny the petition for writ of certiorari

seeking review of the judgment of the Court of Appeals

for the Fourth Circuit.

Petitioner Rockland Industries, Inc. (“Rockland’’) dis-

torts the decision of the court below and attempts to

fabricate a conflict among the Circuits to justify review

by this Court. This case, however, involves nothing more

than the straightforward and routine application of the

universally-accepted abuse of discretion standard to a

trial court’s decision to grant a new trial. This inher-

]

2

ently fact-specific question is of no significance beyond

‘he confines of this particular litigation, a fact recognized

by the court below when it concluded that there was no

need even to publish its opinion.

There is no conflict among the Circuits. Each of the -

Circuits—like the court below—recognize that a new trial

motion is committed to the discretion of the trial judge,

but that the trial judge’s decision may be reviewed for

abuse of discretion.

The “Questions Presented,” as framed by Rockland,

are not even presented on the facts of this case. Rock-

land first asks whether an appellate court errs “when it

fails to give any deference to a trial court’s conclusions

concerning credibility of witnesses and weight of the evi-

dence.” That is not what happened here. The court be-

low gave all appropriate deference to the trial court, but

according deference does not mean abdicating all review.

The court below could not escape the conclusion that “the

evidence in this record” did not permit the trial judge to

overturn the unanimous jury verdicts on the basis of “his

own strong assessment of the evidence.” App. 15a.

Rockland next asks whether the Seventh Amendment

permits a trial judge to order a new trial “when the in-

terests of justice so require.” Of course it does, and the

court below did not rule to the contrary. “The interests

of justice,” however, do not require such action when—as

the court below found to be the case here—“the evidence

in [the] record * * * does not permit * * * negation of |

the jury’s special verdicts.” App. 15a.

STATEMENT OF THE CASE

Rockland’s statement of the case ignores the significant

aspects of the “voluminous” record below that led the

jury to conclude that Chumbley was entitled to recover

damages, and that led the Court of Appeals to conclude

that the trial court erred in substituting its own view

3

of the facts for that of the jury. App. 14a. Since the

decision below that the trial court abused its discretion

turns on the particular facts in the record, it is necessary

to consider those facts in greater detail.

In 1980, Chumbley developed a four-layer insulating

fabric and magnetic-seal hardware system, known as

“Warm Window,” that can reduce wintertime window

heat loss by over 80 percent. Chumbley later applied for

and received a United States patent covering the Warm

Window system. Chumbley’s Warm Window rapidly

achieved remarkable success, with a nationwide network

of over 850 distributors by 1982. The volume of Warm

Window sales also grew rapidly, reaching over $497,000

in 1981, and $1.5 million in 1982.

Then Chumbley met Rockland. In August 1982, a

Rockland representative asked Chumbley to consider li-

censing to Rockland the rights to make and sell Warm

Window products. During the course of subsequent nego-

tiations, Rockland informed Chumbley that it was one of

the largest manufacturers of window coverings in the

world and that it possessed the capital and experience

needed to continue expansion of the Warm Window mar-

ket. Rockland’s CEO stated during negotiations that he

expected Rockland to increase Warm Window sales rap-

idly to at least $10 million per year.

On October 26, 1982, the parties entered into an Ex-

clusive Patent License Agreement. The Agreement gave

‘ The District Court’s memorandum opinion, entered four months

after trial but prior to preparation of a transcript, erroneously

states that Rockland’s CEO denied making the $10 million projec-

tion. See App. 22a n.5. The trial transcript flatly contradicts the

District Court’s recollection of the testimony, as it does a number

of other important factual assertions relied on in the memorandum

opinion. The uncontradicted testimony of not only Chumbley but also

one of Rockland’s own witnesses confirmed the $10 million projection.

See Transcript of Jan. 15, 1986, at 84-85; Transcript of Feb. 6,

1986, at 93.

4

Rockland the exclusive right to manufacture and market

Warm Window products in return for Rockland’s prom-

ise to pay Chumbley royalties and commissions on sales,

computed according to various formulae established in

the Agreement and subsequent amendments. To protect

Chumbley’s interests, the Agreement obligated Rockland

to “diligently use reasonable efforts to promote the sale

of the Products.”

After Rockland took over responsibility for the Warm

Window business, the consistent growth in sales came to

an end. Instead of continuing to expand toward the $10

million annual sales projected by Rockland’s CEO, Warm

Window sales actually declined from their 1982 level dur-

ing each of the three years following execution of the

Agreement. That decline has continued since trial, with

Warm Window sales in 1987 plummeting to less than

one-third of their 1982 level.

Convinced that this decline was caused by Rockland’s

breach of the Agreement, Chumbley instituted this diver-

sity action. Chumbley’s principal claim was that Rock-

land had breached its express contractual obligation to

“diligently use reasonable efforts” to market the prod-

ucts. Chumbley also claimed that Rockland still had not

reimbursed him $7,700 for promotional expenses he had

incurred in accordance with the parties’ Agreement.

Rockland, in turn, asserted a variety of counterclaims,

all but one of which were dismissed prior to the end of

the trial. That lone surviving counterclaim alleged that

Chumbley had wrongfully induced Rockland to enter into

the Agreement.”

2 Chumbley’s complaint raised two additional claims that were

resolved in his favor prior to submission of the case to the jury.

First, Chumbley alleged that Rockland had failed to account for

and pay him royalties and commissions on approximately $100,000

of sales that Rockland in fact had completed. During testimony

before the jury, a Rockland corporate officer admitted that Rockland

had underpaid royalties and commissions owed to Chumbley, and

5

Trial lasted six weeks, including twenty-one days dur-

ing which the parties presented evidence to the jury.

Chumbley presented testimony from five current or for-

mer Rockland employees, three sales representatives re-

sponsible for coordinating Rockland’s Warm Window

sales in various regions of the country, and several whole-

sale and retail distributors who handled Warm Window

products both before and after Rockland’s entry on the

scene.

The testimony of those witnesses demonstrated not only

that Rockland had failed to commit adequate resources

and attention to marketing Warm Window products, but

also that Rockland had breached its contractual obliga-

tion by engaging in four specific types of conduct: (1)

Rockland’s CEO changed the name of Warm Window

products, without any advance market research or follow-

up advertising, and despite strong objections from both

the distributor network and Rockland’s own marketing

personnel; (2) Rockland began marketing an inferior,

competing insulated window covering product, causing

confusion among distributors and interfering with their

marketing of Warm Window products; (3) Rockland’s

own advertising manager admitted that many advertis-

ing efforts for Warm Window products had been disor-

ganized and mismanaged, leaving Warm Window, in his

words, “one of the best kept secrets” in the industry;

and (4) Rockland assigned promotional and marketing

responsibilities to persons who either were admittedly

incompetent or had a direct financial incentive to promote

that admission led to a court-supervised settlement of the claim.

Second, Chumbley alleged that Rockland had wrongfully departed

from the Agreement in calculating royalties and commissions on

one category of Warm Window sales. At the close of evidence, the

District Court entered a directed verdict for Chumbley on that

claim. Rockland did not appeal from the judgment on that directed

verdict.

competing products at the expense of Warm Window

sales. The jury also received testimony from a qualified

marketing expert, who explained why each practice de-

scribed above was unreasonable and necessarily would

have an adverse effect’on Warm Window sales.

On the issue of damages, Chumbley presented testi-

mony from a second expert, economist Linda McLaughlin.

The District Court accepted McLaughlin as a qualified

expert based on her education as an economist, her cur-

rent position as a vice president with National Economic

Research Associates, and her past experience calculating

economic damages in approximately forty other cases.

McLaughlin placed before the jury damages calculations

arrived at in accordance with standard economic meth-

odology, based on (1) an analysis of Warm Window sales

before and after Rockland took responsibility for the

business, and (2) an evaluation of the sales performance

of related products as well as more general factors af-

fecting the Warm Window market.

After two days of voir dire examination and cross-

examination concerning McLaughlin’s methodologies, the

District Court ruled that “an opinion has been fairly

given” as to two different damages calculations, one based

on an assumption of a “flat” development of the Warm

Window market ($1,020,510), and the second based on

an assumption that the Warm Window market would

experience growth in accordance with the overall window

coverings industry ($1,531,572). Transcript of Feb. 4,

1986, at 78, 121, 129. Thus, at the time of trial, the Dis-

trict Court specifically rejected Rockland’s efforts to pre-

clude or strike McLaughlin’s testimony, ruling:

I’m satisfied under Maryland substantive law that

damages have [been] proved to a certainty and in-

deed I think they’ve been proved well enough. The

testimony is admissible.

on-

7

I do have some questions about it. I have some

factual questions but they’re not for me to resolve,

they’re for the jury to resolve. [Transcript of Feb.

4, 1986, at 77.]

Later, in rejecting Rockland’s motion for a directed ver-

dict, the District Court again specifically addressed Rock-

land’s objections to McLaughlin’s testimony, and con-

cluded they were “for the jury in my judgment, not for

me, * * * the evidence was properly admitted.” Tran-

script of Feb. 5, 1986, at 149.

Based on a review of evidence submitted by both sides,

including McLaughlin’s testimony, the jury returned a

verdict in Chumbley’s favor on all counts. A review of

the special verdict form, reprinted in full by the Court

of Appeals, App. 9a-12a, demonstrates that the jury

plainly understood the issues presented. The jury (1)

specifically found that Rockland had breached its “rea-

sonable efforts” obligation, (2) awarded Chumbley

$1,000,000 to compensate for that breach, (3) awarded

Chumbley an additional $7,700 for promotional expenses

not yet reimbursed by Rockland, and (4) rejected Rock-

land’s misrepresentation counterclaim.

The District Court thereupon granted Rockland’s post-

trial motion for judgment n.o.v., entered judgment for

Chumbley in the amount of $1, and conditionally granted

Rockland’s motion for a new trial should the judgment

n.o.v. be reversed on appeal. The Fourth Circuit reversed

the judgment n.o.v. and the conditional grant of a new

trial, directing that judgment be entered for Chumbley

in accordance with the jury verdicts. App. 14a-15a.

Rockland does not here dispute that the District Court

erred in most of its post-trial rulings setting aside the

jury verdicts. Rockland does not contest the Fourth Cir-

cuit’s unanimous decision to reverse the District Court’s

entry of judgment n.o.v. on the jury’s award of $1,000,000

compensatory damages for Chumbley’s principal claim.

8

See Pet. at 4. Nor does Rockland contest the appellate

court’s reversal of the judgment n.o.v. and alternate new

trial order entered by the District Court sua sponte on

the $7,700 claim, or its rejection of Rockland’s argument

on appeal that the District Court’s order should be read

to set aside the verdict in Chumbley’s favor on the coun-

terclaim. See id. at 3 n.1. Instead, while apparently

conceding that the Fourth Circuit acted correctly in re-

versing the District Court on each of these points, Rock-

land maintains that the appellate court erred in reversing

the District Court’s new trial order.

There appears to be considerable confusion over what

the District Court’s new trial order meant to accomplish.

Rockland suggests that the District Court intended to

order a new trial on “all issues.” See id. at 3. The

Fourth Circuit—recognizing that the District Court was

not explicit in its rulings—concluded -that “the district

court did not set aside plaintiffs’ entitlement, as the re-

sult of the jury’s answers to the special questions, to

judgment as to liability” on Chumbley’s “reasonable ef-

forts” claim. App. 4a; accord App. 18a. Thus, unlike

Rockland, the court below read the District Court’s order

to grant a new trial solely on the issue of damages. The

Fourth Circuit nevertheless reviewed the evidence on the

issue of liability, concluding “there was clear evidence

to support the jury’s special verdicts in favor of plain-

tiffs concerning liability,” based on “each and all” of

the four criticisms of Rockland’s marketing practices ad-

vanced by Chumbley at trial. App. 13a-14a.

In reviewing the District Court’s new trial order as

to damages, the court below, citing decisions from the

Fourth and other Circuits, applied the abuse of discre-

tion standard.* The Fourth Circuit first noted that the

3 See, e.g., App. 9a (“ ‘the action of a district court in granting

a new trial is to be reversed only upon a showing of abuse of dis-

9

District Court’s post-trial comments concerning Mc-

Laughlin’s damages testimony differed substantially from

the evaluation provided by the trial judge himself during

and shortly after that testimony. App. 14a. The trial

judge’s post-trial memorandum opinion offered no ex-

planation whatever of what factors, if any, caused him

to abandon his first-held position that McLaughlin’s tes-

timony was both properly admitted and adequate to prove

damages.

The Fourth Circuit then noted, consistent with the

District Court’s own position at trial, that McLaughlin’s

testimony provided a sound evidentiary basis upon which

“a jury could have awarded damages not only of $1,000,-

000 but, under certain of the approaches relied upon by

plaintiffs, in excess of $1,000,000.” App. 14a. The court

below recognized that the district judge had to “grapple

with his own strong assessments of the evidence,” but

concluded that “the evidence in this record, as in Abasie-

kong, simply does not permit this court to permit nega-

tion of the jury’s special verdicts.” The Fourth Circuit’s

review of the “voluminous” record thus compelled a con-

clusion that this was a case in which the District Court

had abused its discretion in rejecting the jury verdicts

and ordering a new trial. App. 14a-15a.*

cretion’”’) (quoting Abasiekong v. City of Shelby, 744 F.2d 1055,

1059 (4th Cir. 1984)); App. 5a (abuse of discretion review of

grant of new trial) (citing Midcontinent Broadcast Co. v. North

Central Air, Inc., 471 F.2d 357 (8th Cir. 1973) ).

4 After receiving the Fourth Circuit’s mandate and a motion

for relief from judgment filed by Rockland, but before acting to

enter judgment as directed by the mandate, the trial judge recused

himself from the case. He observed in a memorandum to counsel

that “I question my own ability to be impartial in making any

further rulings.” Mem. to Counsel, Civ. No. JF M-84-3237 (Jan. 13,

1988). The case has been reassigned to another judge.

10

REASONS THE PETITION SHOULD BE DENIED

I. There Is No Conflict Among The Circuits.

The Circuits are unanimous in holding that a district

court’s decision on a motion for new trial is subject to

appellate review under the familiar “abuse of discre-

tion” standard.’ Rockland itself concedes that “each of

the Circuits will review a trial court’s grant or denial

of a new trial motion not only for errors of law, but

also for an ‘abuse of discretion’ * * *.” Pet. at 12.

Rockland contends, however, that this Court has never

confirmed the appropriateness of such review. Jd. Given

the complete unanimity among the Circuits on the issue,

there would seem to be little reason for this Court to do

so. This Court’s limited resources are expended on certi-

orari to resolve conflicts among the Circuits, not to con-

firm unanimous and well-established understandings.

5 See, e.g., Coffran v. Hitchcock Clinic, Inc., 683 F.2d 5, 6-7 (1st

Cir.) (reversing district court order granting new trial upon finding

of abuse of discretion), cert. denied, 459 U.S. 1087 (1982); Berner

Vv. British Commonwealth Pacific Aftrlines, Ltd., 346 F.2d 532, 541

(2d Cir. 1965) (same), cert. denied, 382 U.S. 983 (1966); Grove

v. Dun & Bradstreet, Inc., 438 F.2d 433, 438 (3d Cir.) (same),

cert. denied, 404 U.S. 898 (1971); Abasiekong v. City of Shelby,

744 F.2d 1055, 1059 (4th Cir. 1984) (same); Conway v. Chemical

Leaman Tank Lines, Inc., 610 F.2d 360, 367 (5th Cir. 1980) (same) ;

Manning V. Altec, Inc., 488 F.2d 127, 133 (6th Cir. 1973) (same);

Marshall’s U.S. Auto Supply, Inc. v. Cashman, 111 F.2d 140, 141

(10th Cir. 1940) (same); Williams vy. City of Valdosta, 689 F.2d

964, 974 (11th Cir. 1982) (same); Taylor v. Washington Terminal

Co., 409 F.2d 145, 149 (D.C. Cir. 1969) (same); General Foam

Fabricators, Inc. v. Tenneco Chemicals, Inc., 695 F.2d 281, 288-

289 (7th Cir. 1982) (reviewing district court order granting new

trial under abuse of discretion standard); Russell v. United Parcel

Service, Inc., 665 F.2d 1188, 1191 (8th Cir. 1981) (same); Fount-

Wip, Inc. v. Reddi-Whip, Inc., 568 F.2d 1296, 1302 (9th Cir. 1978)

(same); Mainland Industries, Ine. v. Standal’s Patents Ltd., 799

F.2d 746, 749 (Fed. Cir. 1986) (“Appellate review of a motion for

new trial is conducted on an abuse of discretion standard”).

11

In any event, this Court has confirmed the appropri-

ateness of appellate review of new trial decisions. The

very decision on which Rockland so heavily relies, Allied

Chemical Corp. v. Daiflon, Inc., 449 U.S. 33 (1980), con-

sidered the propriety of reviewing on mandamus an

order granting a new trial on the ground that “the evi-

dence did not support the amount of the jury award.”

Id. at 33. This Court held mandamus was inappropriate

precisely because “[a] litigant is free to seek review of

the propriety of such an order on direct appeal after a

final judgment has been entered.” Jd. at 36. That is pre-

cisely what Chumbley did here, and what the Circuits

uniformly permit litigants to do. Rockland’s radical sug-

gestion that such orders should be wholly unreviewable

has thus been rejected by this Court and every Circuit.®

Rockland concedes as much, arguing that “/a]lthough

all appellate courts nominally purport to apply an ‘abuse

of discretion’ standard,” they really do something else.

Pet. at 9. The issue, according to Rockland, reduces to

whether the abuse of discretion standard “should be

maximally or minimally deferential.” Jd. There is no

confusion among the Circuits over how to apply the

familiar abuse of discretion standard. Application of the

standard turns on the particular factual circumstances

6 Fairmount Glass Works v. Cub Fork Coal Co., 287 U.S. 474

(1933), on which Rockland relies, is not to the contrary. The Court

in that case simply confirmed that the decision on a new trial motion

is “within the discretion of the trial court,” id. at 482, which is true

of any matter nonetheless subject to full appellate review for abuse

of discretion. Indeed, the Court in Fairmount expressly noted

that it had “no occasion to determine” in the case before it whether

the new trial decision was subject to review for abuse of discretion.

Id. at 485. In the other case on which Rockland relies, United States

Vv. Socony-Vacuum Oil Co., Inc., 310 U.S. 150 (1940), this Court

expressly held that there had been no showing of abuse of discretion.

Id. at 247. It is also significant that both Fairmount and Socony-

Vacuum—unlike the present case—involved review of a district

court’s denial of a new trial motion.

12

of each specific case, the record before the court, the

conduct of the trial below, the nature of the evidentiary

or other factual issues in dispute, and countless other

factors that vary from case to case. In some cases the

peculiar factual circumstanc&s may call for maximum

deference; in others, minimal deference. Rockland con-

fuses application of a uniform standard of review to

diverse factual situations—with differing results depend-

ing on the facts—with disagreement over the standard

itself.

The very cases on which Rockland relies prove that

there is no disagreement over application of the abuse of

discretion standard. For example, Rockland cites Harris

Vv. Quinones, 507 F.2d 533 (10th Cir. 1974), as epitomiz-

ing a highly deferential approach. Pet. at 6. In sup-

posed contrast, J & H Auto Trim Co., Inc. v. Bellefonte

Insurance Co., 677 F.2d 1365 (11th Cir. 1982), evinces

a non-deferential approach, involving independent review

of the record. Pet. at 7. It was the “deferential” court

in Harris, however, that undertook a “careful review of

the entire record,” 507 F.2d at 536, and it was the “non-

deferential” court in J & H Auto Trim that expressly

recognized that a new trial order “was an exercise of the

trial court’s discretion and our review must be limited

accordingly.” 677 F.2d at 1373. The courts did not differ

in their approach to the routine question of whether the

trial court abused its discretion, but appropriately

reached different results on the different facts of the dis-

tinct cases before them.’

7 Even if the conflict asserted by Rockland existed—and it does

not—the present case would hardly be an appropriate vehicle to

address it. Nothing in the opinion below suggests exacting ap-

pellate scrutiny, and the court did not employ any. Indeed, while

Rockland’s “Questions Presented” and its asserted conflict hinge

on “[a]ppellate invocation of the Seventh Amendment in order to

justify more stringent review over new trial orders,” Pet. at i, 17,

the court below did not even cite the Seventh Amendment, let alone

rest its analysis on it. See, e.g., The Monrosa v. Carbon Black Ex-

ew ln Bi a

A SLID Se MORONS ae sah Bee

ba Pinot Dt aah te i Le

13

What Rockland views as internal conflict within the

Circuits is again nothing more dramatic than the ap-

plication of the familiar abuse of discretion standard to

widely differing factual circumstances. Indeed, Rockland

is compelled to acknowledge that the Fourth Circuit, in

an opinion published two weeks before the unpublished

memorandum below, reiterated the very approach that

allegedly “conflicts” with that below. Pet. at 8-9. ‘The

appropriately deferential approach of Johnson v. Par-

rish, 827 F.2d 988 (4th Cir. 1987), however, is wholly

consistent with a long line of Fourth Circuit precedent

recognizing the deference due the decision of a trial

court on a new trial motion. See, e.g., Aetna Casualty

& Surety Co. Vv. Yeatts, 122 F.2d 350, 354 (4th Cir.

1941) ; Williams v. Nichols, 266 F.2d 389, 393 (4th Cir.

1959) ; Wyatt v. Interstate & Ocean Transport Co., 623

F.2d 888, 891-892 (4th Cir. 1980); Abasiekong v. City

of Shelby, 744 F.2d at 1059. The unpublished decision

‘ below hardly departed from this well-established ap-

proach; indeed, the court below cited these cases in its

analysis. App. 6a-9a.

Rockland’s position is flatly contradicted not only by

every Circuit Court of Appeals, but by the Federal Rules

of Civil Procedure as well. Not surprisingly, Rockland

does not even cite the pertinent rule. Rule 50(c) speci-

fies that when a district court enters judgment n.o.v.

and conditionally grants a new trial, and the judgment

is reversed on appeal, “the new trial shall proceed unless

the appellate court has otherwise ordered.” Fed. R. Civ.

P. 50(c) (1) (emphasis supplied). As the Advisory Com-

mittee Note explains:

The party against whom the judgment n. o. v. was

entered below may, as appellant, besides seeking to

port, Inc., 359 U.S. 180 (1959), where this Court was compelled to

dismiss a writ of certiorari as improvidently granted, when the

broad question presented in the petition turned out not to be

presented in the case.

14

overthrow that judgment, also attack the conditional

grant of the new trial. And the appellate court, if it

reverses the judgment n. 0. v., may in an appropri-

ate case also reverse the conditional grant of the new

trial and direct that judgment be entered on the

verdict. [81 F.R.D. 645 (emphasis supplied) (citing,

inter alia, Lind v. Schenley Industries Inc., 278 F.2d

79 (3d Cir.), cert. denied, 364 U.S. 835 (1960),

criticized by Rockland at Pet. 17).]

In Neely v. Martin K. Eby Construction Co., Inc., 386

U.S. 317, 323 (1967)—again not even cited by Rockland

—this Court confirmed that Rule 50(c) “contemplates

that the appellate court will review on appeal * * * the

trial court’s conditional disposition of the motion for new

trial. This review necessarily includes the power to grant

or to deny a new trial in appropriate cases.” Rockland’s

suggestion that appellate review of new trial decisions is

somehow unwarranted has thus been definitively re-

jected by the Federal Rules and this Court.

II. The Highly Fact-Specific Decision Below Was Correctly ©

Decided, And Has No Significance Beyond The Confines

Of This Case.

The only issue in this run-of-the-mill case is whether

the court below correctly applied the abuse of discre-

tion standard to the trial judge’s actions, in light of the

particular facts in the record. As this Court held long

ago, “[wle do not grant a certiorari to review evidence

and discuss specific facts.” United States v. Johnston,

268 U.S. 220, 227 (1925).

The fact that nothing more dramatic is at issue was

confirmed by the court’s determination that nothing in

its disposition even warranted publication of an opinion.

The Fourth Circuit publishes an opinion if it

establishes, alters, modifies, clarifies, or explains a

rule of law within this Circuit; or it involves a legal

issue of continuing public interest; or it criticizes

15

existing law; or it contains an historical review of a

legal rule that is not duplicative; or it resolves a

conflict between panels of this Court, or creates a

conflict with a decision in another circuit. [Fourth

Circuit Internal Operating Procedure 36.3. ]

The disposition of this case by the Fourth Circuit, as

that court recognized, is of moment only to these par-

ticular litigants. It presents no issues of broader signifi-

cance justifying expenditure of this Court’s limited re-

sources on certiorari.

In any event, it is clear that the decision below is

correct. Rockland does not challenge the determination

below that the District Court erred in granting judgment

n.o.v. Pet. at 4. The District Court, in explaining its

alternative grant of a new trial, concluded that “one

factor is paramount. * * * [T]here was absolutely no

reason for Rockland not to exercise reasonable efforts to

market Warm Window.” App. at 26a-27a. As the Court

of Appeals explained, however, the District Court was

plainly wrong. There was evidence in the record that

“Rockland marketed and promoted competing products”

and that “Rockland assigned promotional and marketing

duties in connection with [Warm Window] products to

persons who either had reasons to give promotional pref-

erence to products other than [Warm Window] -products

or who were not persons competent to perform such

duties.” App. 12a. With respect to Chumbley’s expert

witness on damages, the District Court admitted her

testimony only after, in the words of the Court of Ap-

peals, “a lengthy voir dire, which featured full, probing

direct examination and cross-examination.” App. 13a.

The District Court itself initially recognized that the

issues raised by the expert were “not for me to resolve,

they’re for the jury to resolve.” App. 14a.

The Court of Appeals tactfully recognized that the

District Court had a “strong preference” for Rockland’s

position and was compelled “to grapple with his own

16

strong assessments of the evidence * * *.” App. 14a,

15a. The appellate court’s perceptive understanding was

confirmed when its mandate directing reinstatement of

the jury verdict returned to the District Court. The

trial judge recused himself, noting that “I question my

own ability to be impartial in making any further rul-

ings.” ® The objective and impartial review of the Court

of Appeals, according all appropriate deference to the

District Court, was clearly correct.

This Court will grant certiorari “only when there are

special and important reasons therefor.” S.Ct. Rule 17.1.

The unpublished per curiam decision below, applying to

the particular facts of a voluminous record a familiar

legal standard accepted by each of the Circuits, clearly

does not warrant review by this Court.

CONCLUSION

For the foregoing reasons, the petition should be denied.

Respectfully submitted,

JOHN G. ROBERTS, JR.*

WILLIAM D. NUSSBAUM

STEVEN J. ROUTH

HOGAN & HARTSON

555 Thirteenth Street, N.W.

Washington, D.C. 20004

(202) 637-6448

Counsel for Respondents

* Counsel of Record

8 Mem. to Counsel, Civ. No. JFM-84-3237 (Jan. 13, 1988).